Dave's thoughts on whatever happens to be passing through the transom of his mind.

20110918

Kudos to WaPo

I was kind of mocking last week about WaPo's finally noticing, and prominently mentioning, just how counterproductive current tax rates are. And I still have mixed feelings about that, but I'm glad to see that they're continuing to mention the problem.

This time they're looking more at write-offs and corporate taxes. The teaser in the paper promised to look at the whole problem, but I know it didn't do that, because that would require the entire paper to go into even a cursory look.

And it opens by talking about how

the debate has revolved around “loopholes” for corporate jets and ending “carve-outs” for well-heeled special interests. But if the goal is debt reduction, that’s not where the money is.

The problem with that is that the goal isn't debt reduction. Republicans don't care about it at all; they just use it as a cudgel to attack democrats in power. If they really meant it, they'd do it all the time, not just when there's a democratic President. And the Democrats in Congress, and the President, don't really care about it either, they're just trying to look "bipartisan" (as if that's something that's always useful).

Not to say that I think bipartisanship is terrible, I think it's great when both sides are negotiating in good faith. But when one side is insane, and willing to take hostages, it's just not productive. In fact, it's actually counter-productive.

But to get back to the main point, it isn't an accident that the crap that they're making a big deal about is small-ticket items (not that they aren't hugely egregious, but the dollars compared to the size of the budget is basically pocket change).

I guess the article does get to one important point, though.

All told, federal taxpayers last year received $1.08 trillion in credits, deductions and other perks while paying $1.09 trillion in income taxes, according to government estimates.

Which means that the entire government operating budget is being borrowed. Think about that for a moment, and what it means for what is possible in supply-side economics. You would have to cut more than 99.9% of the total budget in order to stop borrowing. The IRS' operating budget, alone, is more than the $10B left in that difference above. To say nothing of the debt service costs. I'm quite sure those are more than $10B also. You think you could survive without any federal services at all? Well, Social Security has its own funding, so that would still be around. And maybe Medicare/Medicaid would as well (they have their own funding, but I don't know if its enough to pay their bills). But nothing else. Not even salaries for the President and Congress. Ok, maybe that part would be good.

Does the Republican position that tax increases are always evil still make sense?